Arrowhead Pharmaceuticals Inc (ARWR)

Cash conversion cycle

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	—	—	—	—	—	34.57	31.39	—	—	18.19	19.98	18.41	18.48	42.65	44.37	47.24	27.63	29.05	24.55	28.88
Days of sales outstanding (DSO)	days	—	—	—	—	—	1.85	94.66	51.89	2.12	0.35	1.82	0.38	27.07	2.28	3.91	41.15	3.51	64.03	3.33	3.00
Number of days of payables	days	38.19	91.53	29.36	15.64	131.05	27.07	30.19	2.30	8.02	15.86	31.99	14.41	40.07	58.83	35.42	32.26	44.38	28.89	107.57	128.93
Cash conversion cycle	days	-38.19	-91.53	-29.36	-15.64	-131.05	9.34	95.85	49.59	-5.91	2.68	-10.19	4.38	5.48	-13.91	12.87	56.14	-13.25	64.19	-79.70	-97.05

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – 38.19
= -38.19

The cash conversion cycle for Arrowhead Pharmaceuticals Inc has varied significantly over the past few quarters, reflecting changes in the company's operating efficiency and working capital management. A negative cash conversion cycle indicates that the company is able to collect cash from customers before paying its suppliers, resulting in a shorter operating cycle.

In the most recent quarter, as of September 30, 2024, the cash conversion cycle improved to -38.19 days, indicating that Arrowhead Pharmaceuticals Inc is effectively managing its working capital. This improvement suggests that the company has been able to convert its inventory into sales and collect payments from customers more efficiently.

Looking back at previous quarters, Arrowhead Pharmaceuticals Inc experienced a significantly negative cash conversion cycle in June 2023 and September 2023, indicating operational inefficiencies in working capital management during those periods. However, the company managed to correct this issue and improved its cash conversion cycle in subsequent quarters.

Overall, the fluctuating nature of Arrowhead Pharmaceuticals Inc's cash conversion cycle highlights its responsiveness to changes in working capital components, including inventory turnover, accounts receivable collection, and accounts payable management. Analyzing trends in the cash conversion cycle can provide valuable insights into the company's operational efficiency and liquidity management strategies.